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New York Tax Credits

New York’s New Excelsior Jobs Program – New Tax Credits Added

Starting in 2011, New York has created the Excelsior Jobs Program with the incentive to provide job creation and investment incentives for New York companies covering a broad industry reach. This includes targeted industries such as biotechnology, pharmaceutical, high-tech, clean-technology, green technology, financial services, agriculture and manufacturing.  This also includes software development companies under the high-tech definition.

Does your Company have equipment placed in service in New York?

New York offers an incentive for businesses in the form of an Investment Tax Credit (ITC) which is a credit on purchases of buildings, machinery or equipment used to produce goods by manufacturing, processing assembling and other activities. The definition of ‘manufacturing’ and ‘processing’ can also include developing computer software as well as producing theatrical or television content. Broker/Dealers and Investment Advisory services providers are also eligible for ITC.

The standard ITC credit rate is 5% on investments up to $350 million subject to certain limitations, plus potential Employment Incentives credits. Under the Excelsior program, the ITC credit for qualified recipients will be a refundable credit equal to 2% of the cost of qualified investments.

Note, the ITC has been in effect in New York for a number of years; thus your company may still be eligible for prior year ITC benefits even before the new Excelsior Program started.

Have you hired new employees in New York?

The Excelsior benefits include a new Excelsior Jobs Tax Credit, a refundable tax credit worth up to $5,000 per employee added in New York.

Or if your Company has added employees in prior years, you may also be eligible for Employment Incentive Credits which may expand your ITC credits.

New R&D Tax Credit for New York Activities

Starting in 2011, New York has joined many other states in offering a new R&D tax credit which is another Excelsior refundable tax credit where qualifying businesses are eligible to claim a refundable New York State tax credit equal to 10% of the federal R&D credit for the portion attributable to R&D conducted in New York.

The Excelsior Real Property Tax Credit

This credit is intended to incentivize companies locating in certain distressed areas and to businesses in targeted industries that meet certain employment and investment thresholds.

Excelsior Program Eligibility

The new Excelsior Program in New York is targeted at businesses making a substantial commitment to growth – either in employment or through investing significant capital in a New York facility.
There are two ‘tracks’ to show program eligibility:

  • Job Growth Track – The headcount numbers vary by industry but the goal is to add a certain number of net new jobs each year. New York will fund 75% of the program dollars (capped at $500 million/year) towards this Job Growth Track.
  • Investment Track – Where the company has to make a significant capital investment and maintain at least 50 employees – this includes having to demonstrate a benefit/cost ratio of at least 10:1 (benefit cost ratio=Total investment, wages, and benefits/Excelsior Jobs Program Credits)

In the Excelsior Program application, the taxpayer projects the costs for each credit over the next 5 years.  The application is filed with the Empire State Development (ESD) and based on the application, the ESD calculates the maximum potential credits over a 10 year period.  If the application is approved, the taxpayer enters into an agreement with the ESD that states the tax credits as well as job and investment requirements each year.  If the taxpayer does not meet the eligibility requirements in any year, the Company foregoes the credits and these credits do not carry over to a later year.

There is a limited amount of credit dollars allowed for the Excelsior Program:  $500M per year in 2011-2015, with a lifetime cap of $2.25B.

The ESD will publicly report out who the recipients are, the amount of credit they get, total number of new jobs created in total and by taxpayer, aggregate new investment in NYS in total and by taxpayer.